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Harvard Case - Leading Open Innovation at BT

"Leading Open Innovation at BT" Harvard business case study is written by Amy C. Edmondson, Jean-Francois Harvey, Johnathan Cromwell. It deals with the challenges in the field of Operations Management. The case study is 14 page(s) long and it was first published on : Jul 26, 2018

At Fern Fort University, we recommend that BT implement a comprehensive open innovation strategy focused on fostering external collaboration, leveraging digital platforms, and integrating innovation into its core operations. This strategy should prioritize building a strong ecosystem of partners, leveraging data and analytics for informed decision making, and promoting a culture of experimentation and continuous improvement.

2. Background

This case study focuses on BT, a leading telecommunications company facing increasing pressure to innovate and adapt to a rapidly changing technological landscape. BT's traditional approach to innovation, relying primarily on internal R&D, is proving insufficient to keep pace with the evolving needs of its customers and the competitive landscape. The case highlights the company's efforts to embrace open innovation, exploring partnerships with external stakeholders, including startups, universities, and other businesses.

The main protagonists of the case are:

  • Gavin Patterson: CEO of BT, who recognizes the need for a more open and collaborative approach to innovation.
  • Clive Selley: CTO of BT, who champions the adoption of new technologies and digital platforms to support open innovation initiatives.
  • The Open Innovation team: A dedicated group within BT tasked with developing and implementing the company's open innovation strategy.

3. Analysis of the Case Study

This case study can be analyzed using the following frameworks:

1. Porter's Five Forces: This framework helps understand the competitive landscape and the forces driving innovation. BT faces intense competition from established players and new entrants, with the threat of substitutes increasing due to the rapid evolution of technology. This highlights the importance of continuous innovation and agility for BT's long-term success.

2. Innovation Adoption Curve: This framework helps understand the different stages of innovation adoption and the challenges associated with each stage. BT is currently transitioning from a closed innovation model to a more open approach, requiring a shift in mindset and organizational culture. This transition requires careful planning and communication to ensure successful adoption and engagement from all stakeholders.

3. Value Chain Analysis: This framework helps identify the key activities within BT's operations where open innovation can create significant value. Open innovation can improve product development, enhance service delivery, optimize supply chain management, and drive operational efficiency.

4. Open Innovation Framework: This framework provides a structured approach to implementing open innovation initiatives. BT needs to clearly define its innovation goals, identify potential partners, establish mechanisms for collaboration, and develop processes for managing intellectual property and commercialization.

4. Recommendations

1. Establish a Robust Open Innovation Ecosystem:

  • Partner with Startups: Develop programs to identify and collaborate with promising startups, providing access to BT's resources and expertise while gaining access to cutting-edge technologies and innovative solutions.
  • Engage with Universities: Foster collaborations with universities to access research capabilities, talent pools, and emerging technologies.
  • Create Open Innovation Platforms: Develop online platforms to connect with external innovators, share challenges, and solicit solutions.
  • Leverage Industry Consortiums: Participate in industry consortia to share best practices, collaborate on research projects, and develop industry standards.

2. Leverage Data and Analytics:

  • Data-Driven Decision Making: Utilize data and analytics to identify emerging trends, analyze customer needs, and evaluate the potential impact of different innovation initiatives.
  • Predictive Analytics: Employ predictive analytics to forecast market demand, anticipate technological disruptions, and optimize resource allocation.
  • Performance Monitoring: Track key performance indicators (KPIs) to measure the effectiveness of open innovation initiatives and identify areas for improvement.

3. Foster a Culture of Innovation:

  • Empowerment and Collaboration: Encourage employees to explore new ideas, collaborate with external partners, and experiment with different approaches.
  • Reward Innovation: Implement incentive programs to recognize and reward employees for their contributions to innovation.
  • Continuous Learning: Provide training and development opportunities to equip employees with the skills and knowledge needed to thrive in a rapidly evolving technological landscape.

4. Integrate Open Innovation into Core Operations:

  • Product Development: Integrate open innovation into the product development process, leveraging external insights and expertise to create innovative products and services.
  • Service Delivery: Utilize open innovation to enhance service delivery, improve customer experience, and develop new service offerings.
  • Supply Chain Management: Explore open innovation opportunities to optimize supply chain operations, improve logistics, and reduce costs.
  • Operations Strategy: Integrate open innovation into the overall operations strategy, driving continuous improvement and fostering agility.

5. Basis of Recommendations

These recommendations are based on the following considerations:

  • Core Competencies and Consistency with Mission: The recommendations align with BT's core competencies in telecommunications and technology, while supporting the company's mission to deliver innovative solutions to its customers.
  • External Customers and Internal Clients: The recommendations address the needs of BT's external customers by providing them with innovative products and services, while also empowering internal clients to contribute to the innovation process.
  • Competitors: The recommendations help BT stay ahead of the competition by fostering a culture of innovation and leveraging external expertise to develop cutting-edge solutions.
  • Attractiveness: The recommendations are expected to generate significant value for BT, leading to increased revenue, improved customer satisfaction, and enhanced competitive advantage.

6. Conclusion

By embracing open innovation, BT can unlock significant opportunities for growth and innovation. By fostering a collaborative ecosystem, leveraging data and analytics, and integrating innovation into its core operations, BT can position itself as a leader in the rapidly evolving telecommunications industry.

7. Discussion

Alternatives:

  • Continuing with the current, closed innovation model: This option would limit BT's access to external expertise and innovation, making it difficult to keep pace with the rapidly changing technological landscape.
  • Focusing solely on internal R&D: This option would limit BT's ability to leverage external innovation and could lead to a lack of diversity in ideas and solutions.

Risks:

  • Intellectual property protection: BT needs to carefully manage intellectual property rights when collaborating with external partners.
  • Security and data privacy: BT needs to ensure the security and privacy of its data and systems when working with external partners.
  • Cultural resistance: Some employees may resist the shift to a more open and collaborative approach to innovation.

Key Assumptions:

  • BT is committed to investing in open innovation initiatives.
  • BT has the necessary resources and capabilities to effectively manage open innovation partnerships.
  • BT's employees are willing to embrace a more collaborative and experimental approach to innovation.

8. Next Steps

Timeline:

  • Year 1: Develop a comprehensive open innovation strategy, establish key partnerships, and pilot initial open innovation projects.
  • Year 2: Expand open innovation initiatives, integrate open innovation into core operations, and measure the impact of open innovation on key performance indicators.
  • Year 3: Optimize open innovation processes, build a robust open innovation ecosystem, and establish BT as a leader in open innovation.

Key Milestones:

  • Develop a clear open innovation strategy and roadmap.
  • Identify and select key partners for collaboration.
  • Launch pilot open innovation projects.
  • Develop metrics to track the effectiveness of open innovation initiatives.
  • Integrate open innovation into core business processes.
  • Promote a culture of innovation and collaboration within BT.

By taking these steps, BT can successfully leverage open innovation to drive growth, innovation, and competitive advantage in the years to come.

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Case Description

This case focuses on the genesis and development of the open innovation unit at BT, the strategic value of the unit, and its operating model. As business environment becomes increasingly dynamic and firms are pressured to achieve faster innovation rates, there may be accompanying shifts in the way they pursue innovation. This case illustrates the challenges that this poses to large corporations as well as the key activities the open innovation unit engages in to deal with them. In particular, it must manage relationships with various stakeholders to leverage the value of matching external ideas and technologies with internal resources and capabilities. The case poses the question: Should the open innovation unit fully incubate some ideas, instead of always seeking partnership with commitment from a customer-facing unit?

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